Sheriff, DA investigating bankruptcy-bound CA city

Mayor Patrick J. Morris of San Bernardino poses for a portrait outside City Hall in San Bernardino, Calif., on Wednesday, July 11, 2012. The San Bernardino city council voted Tuesday night to authorize the city attorney to seek federal bankruptcy protection, becoming the third California city poised to do so in less than two weeks. (AP Photo/Grant Hindsley)
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Mayor Patrick J. Morris of San Bernardino poses for a portrait outside City Hall in San Bernardino, Calif., on Wednesday, July 11, 2012. The San Bernardino city council voted Tuesday night to authorize the city attorney to seek federal bankruptcy protection, becoming the third California city poised to do so in less than two weeks. (AP Photo/Grant Hindsley)
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A San Bernardino sign on I-10 East is seen on Wednesday, July 11, 2012 in San Bernardino, Calif. The San Bernardino city council voted Tuesday night in favor of the city filing for bankruptcy. (AP Photo/Grant Hindsley)— AP

A San Bernardino sign on I-10 East is seen on Wednesday, July 11, 2012 in San Bernardino, Calif. The San Bernardino city council voted Tuesday night in favor of the city filing for bankruptcy. (AP Photo/Grant Hindsley)
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Former San Bernardino Mayor Pat Morris ponders a question Wednesday, July 11, 2012, regarding the city council vote authorizing a bankruptcy filing outside San Bernardino City Hall in San Bernardino, Calif. (AP Photo/The San Bernardino Sun, Rick Sforza)— AP

Former San Bernardino Mayor Pat Morris ponders a question Wednesday, July 11, 2012, regarding the city council vote authorizing a bankruptcy filing outside San Bernardino City Hall in San Bernardino, Calif. (AP Photo/The San Bernardino Sun, Rick Sforza)
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Tthe nearly empty E Street Mall in San Bernardino, Calif., is shown on Wednesday, July 11, 2012. The San Bernardino city council voted Tuesday night in favor of the city filing for bankruptcy. City officials have said, San Bernardino "has an immediate cash flow issue" and may not be able to make payroll with a budget shortfall of more than $45 million in the next fiscal year. (AP Photo/Grant Hindsley)— AP

Tthe nearly empty E Street Mall in San Bernardino, Calif., is shown on Wednesday, July 11, 2012. The San Bernardino city council voted Tuesday night in favor of the city filing for bankruptcy. City officials have said, San Bernardino "has an immediate cash flow issue" and may not be able to make payroll with a budget shortfall of more than $45 million in the next fiscal year. (AP Photo/Grant Hindsley)
/ AP

SAN BERNARDINO, Calif. 
The Sheriff's Department said Thursday it was working with police and the district attorney's office to investigate possible criminal activity within the government of San Bernardino, where city officials voted this week to take the rare step of filing for bankruptcy.

Sheriff-Coroner Rod Hoops said in a statement the investigation began at the request of city officials several months ago.

City Attorney James Penman said earlier this week that the City Council had been presented with falsified documents that masked the city's deficit for 13 of the past 16 years, and he had given evidence of financial mismanagement to "appropriate government agencies," declining to provide further details.

The sheriff declined to release any details about the investigation, who it's focused on, or whether it relates to the bankruptcy or falsified documents.

Mayor Pat Morris told the Riverside Press-Enterprise Thursday night that he was frustrated by the sheriff's disclosure.

"I wonder why they would do that, if it's an ongoing investigation," Morris told the newspaper. "I was a prosecutor, for God sakes. I was a judge, and you don't put out press releases announcing an investigation."

Morris said he was aware of the broad outlines of an investigation but said it was "in no way related to what Penman talked about this week at all, not at all."

Interim City Manager Andrea Travis-Miller, who was instrumental in discovering the degree of the city's financial problems when she and a new finance director took a close look at reports, said she had not discovered any deliberate deception.

"I have not found that there's anything more than negligence, maybe sloppiness," she told the Los Angeles Times on Thursday.

She said the city would have faced the crisis with or without the reporting problems.

After cutting spending, selling assets and asking public employees to take a financial hit, the City Council authorized the city attorney to seek federal bankruptcy protection, becoming the third California city poised to do so in less than two weeks.

San Bernardino - a city of 210,000 people some 60 miles east of Los Angeles - is facing a budget shortfall of about $45 million and annual deficits over the next five years. That's even after the city slashed the workforce by 20 percent over the past four years and negotiated $10 million in annual concessions from employees in each of the past three years.

The problems stem from weak property and sales tax revenues combined with escalating pension costs and a loss of state redevelopment funds, city officials said.

Penman said the city is likely to declare a financial emergency Monday. That could exempt San Bernardino from a 60-day mediation period required under state law prior to a Chapter 9 bankruptcy filing.

In the meantime, city officials are preparing a short-term budget to continue operations. Penman could file for bankruptcy within the next 30 days.

On Thursday, the city's police chief and acting fire chief said they were confident they could continue to handle emergencies despite potential staffing cuts.